Jury: Point Center Financial breached duty to investors

Investor Roddy Miranda of Moreno Valley asks a question of speakers Jeff Gomberg of Signal Mountain, Tenn., and Donna Wall of Newport Beach, both of whom lost substantial investments in deals brokered by Point Center Financial, during a press conference in February in Santa Ana. KEN STEINHARDT, ORANGE COUNTY REGISTER

SANTA ANA – A jury on Thursday ordered veteran loan broker Dan Harkey to pay $4.5 million to dozens of investors for breach of fiduciary duty and breach of contract.

The jury also found that Harkey and his Aliso Viejo company, Point Center Financial Inc., acted with "malice, oppression or fraud." That sets the stage for investors to seek punitive damages beginning Friday in Orange County Superior Court.

And the jury found that Harkey had engaged in elder abuse against several of his investors.

Harkey and his wife, Assemblywoman Diane Harkey, R-Dana Point, sat together as the verdicts were read. She was dismissed as a defendant in the jury trial.

Lead plaintiff Lloyd Charton, who lives near Harkey in the Ritz Cove neighborhood of Dana Point, said he was "pleased that the jury saw through his 'it's the economy' defense. That's huge."

But the jury rejected the plaintiffs' allegations that Harkey had misled them in real estate deals.

Harkey's attorney, Jeffrey Benice, saw that verdict as a big victory. That, he said, was the part of the case that worried him the most.

The verdicts that the jury gave to the plaintiffs, Benice said, were on claims of mismanagement that the investors as individual shareholders legally could not raise. Only National Financial Lending, a Point Center affiliate in which they were shareholders, could make those claims, Benice said.

"We have high confidence this is ultimately going to be dismissed," Benice said.

David Grant, the plaintiff's attorney, laughed off Benice's assertion.

"That's all been argued," Grant said.

Judge Stephen L. Perk will decide later, in response to a motion that Benice filed, whether to throw out the claims.

The 11-member jury – whittled down from 16 – reached its verdict after nine days of deliberation following a 10-week trial.

The jurors entered the courtroom shortly after 11 a.m. Thursday carrying a foot-thick verdict form. With a break for lunch, it took three hours to read the verdict.

The jurors delivered the same verdict for every plaintiff: Rejecting the allegation that Harkey and Point Center made misstatements, but affirming that Harkey and Point Center engaged in breach of contract and breach of fiduciary duty.

Investor Roddy Miranda of Moreno Valley asks a question of speakers Jeff Gomberg of Signal Mountain, Tenn., and Donna Wall of Newport Beach, both of whom lost substantial investments in deals brokered by Point Center Financial, during a press conference in February in Santa Ana. KEN STEINHARDT, ORANGE COUNTY REGISTER
During a February press conference in Santa Ana, Jeff Gomberg of Signal Mountain, Tenn., reads a letter he wrote to Diane Harkey calling for her to cancel a run for state Assembly until a civil case against Point Center Financial is settled. Harkey's husband, Dan, is named in the suit. A jury on Thursday found in the plaintiffs' favor. KEN STEINHARDT, ORANGE COUNTY REGISTER
In this file photo, investors Jeff Gomberg of Signal Mountain, Tenn., and Donna Wall of Newport Beach, call for defendant Diane Harkey to resign from the state Assembly during a February press conference. KEN STEINHARDT, ORANGE COUNTY REGISTER
Investors in Point Center Financial asks questions during a press conference in this file photo from February. KEN STEINHARDT, ORANGE COUNTY REGISTER
A jury on Thursday found that Dan J. Harkey of Point Center Financial Inc. in San Juan Capistrano breached his fiduciary duty to investors.

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